Order

//Reportable//

03/03/2017

Applicant M/s HCL Infosystems Limited is a company registered under the Indian Companies Act, 1956. It has filed this application for appointment of independent and impartial person as an Arbitrator for settlement of its disputes with the non- applicant and payments to be released to the applicant.

Mr. R.K. Agarwal, learned senior counsel for applicant, argued that the applicant is a leading global technology and IT company and is inter alia engaged in the business of product engineering, custom and packages applications, IT infrastructure services, IT hardware, systems integration and distribution of information and communications technology (ICT) products across a wide range of focused industry verticals. The non-applicant is also a company registered under the provisions of the Companies Act, 1956 having its registered office at Jaipur. The Secondary Education Department, Government of Rajasthan, invited tenders to install computer labs to provide services under Integrated Scheme for Computer Education and Information Technology, in various schools identified in the tenders and the non-applicant was one of the successful bidders of the said tender. The non- applicant, in order to fulfill requirements of the said tenders, approached the applicant-company for supply of computer hardware, peripherals and software to run said computer systems and peripherals. The non-applicant placed a purchase order dated 09.06.2008 with the applicant subsequent to which, to govern the transaction of supply of computer hardware, peripherals and the software between the applicant-company and the non-applicant- company under the purchase order dated 09.06.2008, and subsequent purchase orders, and agreement dated 17.07.2008 was executed between them. Different purchase orders were placed by the non-applicant with the applicant. Clause 11 of the Agreement dated 17.07.2008 states about warrant conditions and penalty for failure of equipment. Clause (i) of the purchase order also provide the warrant of sixty days from date of installation/commissioning.

It is contended that as per the agreement, applicant- company was required to furnish bank guarantees equivalent to certain percentage of order value, for a period of four years and six months or sixty months against respective purchase orders. It furnished four bank guarantees, details of which are contained in para 14 of the application. A letter was sent by the non-applicant to the banker of the applicant dated 05.12.2012 stating that it has failed to invoke the bank guarantee of Rs.68,58,240/- on the basis of alleged failure of the applicant to comply with the terms and conditions of LD/SLA and repair of all hardware. The applicant- company also received a letter dated 05.12.2013, which was sent by non-applicant, under caption “Breach of terms and conditions of the Purchase Order dated 21.09.2010 (CALP-Iind Project)” and that it failed to submit OEM warranty cards of five years, which was in gross violation of terms and conditions of the purchase order. The letter therefore stated that why suitable action should not be taken agaisnt the applicant-company in a competent court of law including invocation of bank guarantee amounting to Rs.2,47,290/- and Rs.8,66,700/-. On receiving the said letter, applicant-company protested by email dated 12.12.2013 and also simultaneously offered to hold meetings of the officers of the non- applicant to amicably resolve the issues raised by them but to the utter shock and surprise, the applicant learnt from their bank that the non-applicant have invoked their remaining three bank guarantees without acceding to the request of the applicant- company. These bank guarantees were executed by the applicant as security for warranty of sixty months and service support on computer hardware, software and peripherals supplied by the applicant-company to the non-applicant. As per the warranty, the applicant-company was required to attend the complai